Free Affidavit - District Court of Delaware - Delaware

Case 1:O4—cv-01294-JJF Document 64 Filed O3/13/2006 Paget of 4
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V ` UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
FLOWSERVE CORPORATION, )
)
Plaintiff )
v. ) C.A. No. O4-1294-JJF
)
BURNS INTERNATIONAL SERVICES )
CORPORATION and BORG—WARNER )
CORPORATION, )
)
Defendants. )
STATE OF ILLINOIS )
) SS.
COUNTY OF COOK )
AFFIDAVIT OF LAWRENCE HENKE
Lawrence Henke, on oath deposes and states as follows:
l) I am an attomey, and am employedl by Flowserve Corporation in the position
of Senior Attomey. I have personal knowledge of the facts stated in this
affidavit, and, if called as a witness, could testify competently thereto.
2) In my role as Senior Attorney, ll hold the responsibility for overseeing,
supervising, and managing all asbestos liability litigation in which Flowsewe
is involved throughout the United States.
3) As part of this overall responsibility, I have held the specific responsibility for
overseeing and supervising litigation naming Flowserve, or any of its
predecessor corporations or legacy product lines, in claims involving
allegations of exposure to asbestos arising out of Borg Warner Corporation’s
historical manufacture of Byron Jackson pumps.
4) In connection with my overall responsibility, I frequently review case
pleadings, motions, and written discovery documents. I confer and
communicate on a daily basis with various other attomeys retained to
represent Flowserve, including both national coordinating counsel and local
counsel situated in various jurisdictions.

Case 1:04-cv-01294-JJF Document 64 Filed O3/13/2006 Page 2 of 4
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A 5) I am familiar with a certain cause of action that has been pending before the
Circuit Court of Cook County, Illinois entitled Continental Casualty
Company, et. al. v. Borg-Warner, Inc. et. al., case number 04 CH 1708. In
that action, the primary and excess liability insurance carriers who had
provided policies of insurance for Borg Warner Corporation are seeking
declaratory relief as to the scope of coverage which their policies proxdde for
various entities, including Flowserve and Burns Intemational Services
Corporation.
6) The lead carrier, CNA Insurance, of the various carriers who are named
plaintiffs in the Cook County action have been providing a common network
of defense counsel to represent the interests of Flowserve, Burns, and other
Borg Wamer Corporation legacy companies in connection with asbestos
liability claims brought against the various Borg Warner legacy companies in
various jurisdictions throughout the United States.
7) At various times throughout 2005, and continuing into 2006, I have learned of
numerous instances in which CNA’s chosen defense counsel have taken
actions which Flowserve never authorized, approved, or directed, but which
have directly contravened Flowservc’s interests, in an apparent effort to assist
other clients and Borg Wamer defendants.
8) More specifically, I have learnedl of multiple instances in which CNA’s
chosen defense counsel have been directed by Bums’ counsel to file an
appearance or answer on behalf of Flowserve or its predecessor BW/IP in
cases where F lowserve or BW/IP were either not named as defendants, or not
served with process.
9) Specific examples of this conduct include the following:
A) In case number BC342803 (plaintiff name: John McNamara)
filed in Califomia, local counsel reported that Bums was named
as the defendant, and was the defendant served with summons.
BW/IP Intemational was included in the caption as a party, but
as of December 19, 2005, had not been served. Nevertheless, on
that date, Anthony Packard, one of the attorneys for Burns, wrote
a letter to California defense counsel, Steven Mitchell, stating:
"Nevertheless, you should appear and answer for BW/IP
successor to Byron Jackson, predecessor to Flowserve." In
addition to substituting in the unserved party, BW/IP
i International as a defendant, Bums directed Mitchell to file a
motion to dismiss Burns as a defendant due to BW/IP’s answer.
A copy of that letter is attached to this affidavit as Exhibit A. I
was carbon copied. I never gave defense counsel the
authorization or approval to appear and answer for BW/IP in the
absence of service of process.

Case 1:O4—cv-01294-JJF Document 64 Filed O3/13/2006 Page 3 of 4
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i B) In the case of Wanda Sue Brewer v. Georgia Pacyic C0. et. al.,
civil action file number 2003VS75250, local counsel filed an
answer on behalf of Flowserve on June 22, 2004, despite having
no record of service on Flowserve. Defense counsel reported that
he had been instructed in a telephone conversation with Ed
Mueller of Nisen and Elliott on June 21, 2004 to file an answer
on behalf of "Flowserve, solely as successor in interest to
BW/IP, Inc. (Borg Wamer Industrial Products), and Byron
Jackson Co." Counsel further reported that he had not received
any further documentation regarding whether Flowserve was
ever properly served with the Complaint.
C) In Barlow v. American Standard Inc. et. al., case no. BC 335153,
in the Superior Court of Califomia, the sued defendant was
Burns Intemational Security Corporation, f7k/a Borg Wamer.
Attached hereto as Exhibit B is a true and accurate copy of the
first two pages of the Complaint for Personal Injury. Neither
Flowserve nor BW/IP is named in the caption. An answer was
filed by local counsel Steven M. Mitchell on or about August 23,
2005 on behalf of "BW/IP as successor in interest to Byron
Jackson Pumps and predecessor to Flowserve, U. S., Inc." A
true and accurate copy of this answer is attached as Exhibit C.
D) In at least twenty-one cases filed in Texas courts in which the
named defendant was Burns Intemational Services, local defense
counsel answered on behalf of BW/IP Intemational, Inc. I was
informed that the instructions to do so were coming from Burns.
E) In several cases filed in Illinois, Bums’ in-house counsel
apparently received and accepted service for BW/IP, even though
he was not the registered agent for such service upon BW/IP, and
nonetheless instructed local counsel to appear for BW/IP.
F) In at least eighteen cases filed in Maryland, Burns was named
and served. Local counsel was instructed to, and did, file an
answer instead for BW/IP.
10) In light of this unauthorized and prejudicial conduct on the part of CNA’s
chosen counsel, Flowserve has determined that it is not only reasonable, but
imperative, so as to fully protect its interests, that its defense in the underlying
asbestos cases be reassigned to other counsel.

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